National Energy Guarantee Implementation “Years Away”, If Ever

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The Federal Government may have been granted a go-ahead on Friday by the states to further develop the NEG, but it’s by no means a free pass.

All states and territories, with the exception of South Australia and the ACT, voted in favour of progressing further work on the design of the National Energy Guarantee.

Victoria’s vote came under fire from Greens climate change and energy spokesperson Adam Bandt MP.

“Daniel Andrews has betrayed renewables by backing in the coal-huggers at COAG. He has sold his soul to coal.”

The Andrews Government took exception to this accusation, stating it realised the “hasty, half-baked National Energy Guarantee is in desperate need of work.”

“We won’t be signing up to anything that undermines Victoria’s nation-leading renewable energy and climate change policies,” says a statement attributed to Minister for Energy, Environment and Climate Change Lily D’Ambrosio. “Otherwise the only guarantee is that we won’t support it.”

South Australia and the ACT also requested the Council model an Emissions Intensity Scheme and the previously proposed Clean Energy Target alongside the Guarantee, but this was declined.

“If you truly believed the NEG was the best option to drive down power prices, why wouldn’t you agree for it to be compared against other mechanisms?” said South Australian Energy Minister Tom Koutsantonis. “The answer is that the NEG is in truth the third best option. That simply isn’t enough and can’t be supported by South Australia.”

Minister  Koutsantonis said South Australia will be moving ahead with the modelling under its own steam.

The Clean Energy Council welcomed the COAG Energy Council meeting outcome, but the CEC says concerns it has previously raised must now be addressed.

“The clean energy industry will only support the NEG policy if it is designed and implemented in a way that ensures strong and sustained investment in renewable energy and energy storage,” stated Clean Energy Council CEO Kane Thornton.

While the details of the proposed NEG are being duked out, Australia’s large-scale renewable energy sector finds itself in limbo – again. As to when the way ahead may be clear, Minister Koutsantonis’s prognosis was less than encouraging.

“To proceed the NEG would require unanimous support at COAG, so this policy is either years away, or won’t happen at all.”

The re-election of Queensland’s Premier Annastacia Palaszczuk will play an important role in what lies ahead for the NEG. RenewEconomy’s Giles Parkinson writes:

“.. the Queensland government is unlikely to approve a National Energy Guarantee that seeks to choke the level of wind and solar that can be added to the national grid, or reinforces the power of the energy incumbents.”

The Energy Security Board will now get to work on fleshing out the design details of the National Energy Guarantee and report back to the COAG Energy Council by April 2018.

The 15th COAG Energy Council ministerial meeting communique can be viewed here.